My mutterings on life, thoughts and actions.

Energy Companies

There is a range of thought when it comes to nationalisation, there are some who hate it and think that everything should be in the private sector, that competition provides best value. This, is somewhat true, but there are too many examples where the value used is simply money with little reference to other values. Therefore it is no surprise to find that standards get driven down when you pay less for a service, something has to give. It is a good way of making a business/service lean, but the problem starts when people don;t know when to stop, or just fixate on the money as the value driver.

Nationalising services and industries is not a simple and obvious “solve it” either. Generally public services have a habit of becoming bloated and a reputation of not being very efficient. Because there is no competition, there is no motivation for good delivery and driving down costs, without an external driver such as government funding cuts. But, on the plus side, without the focused driver on money, nationalised services can take into account other values such as quality of service, pushing for higher standards than just the minimum.

So, it’s no intellectual leap to see that neither model is perfect, but how do you choose between the two? I believe there is a balance to be struck between the two and that balance can be found in how we view competition. This isn’t a perfect view, so lets treat it as a strawman and I would encourage you to challenge it and help refine it.

Competition is in the eye of the beholder. By that I mean that we should be looking at what constitutes a competitive market and who is able to make that choice.

If I want to buy a soft drink, I can go to a vendor and choose from a selection. One day I might be wanting that full sugar caffeine induced goodness, other days I might want a simple lemonade (with a dash of lime). I can choose what drink I want, to suit my budget and also my ethics, I can go to a national chain, or a local shop. A better example is the bacon and sausages for my Saturday morning breakfast. I can choose between the supermarket, or my local butcher. I can make a choice on quality and cost.

Ont he other hand, I want to take a train to Cumbria to see my family. Whilst the rail franchise has been competed, for me as a customer, it is an effective monopoly. I’m buying a ticket and using whatever providers are on the route. This means that I can be using one provider and getting crap overcrowded services, or another provider and there be plenty of seats but I don’t have a choice, it is whoever won a contract that I had no say in. Another example (or 3) is electricity, gas or water. I can swap my provider, but that doesn’t mean my supply comes from a different wire, gas pipe or water main, it is effectively just changing who is managing the paperwork.

So my straw-man argument is this, if the competitive field is an illusion, then it should be considered as fair game for nationalisation, or taken into public service, but with the proviso that they are still ran effectively on a range of values, I don;t mind more expensive if that means better staff conditions, investment and good services, but that has to happen, and there is no reason why it shouldn’t.

I think that the railway industry, electricity, gas and water should be nationalised. The current models are not proper competition and in reality, consumers are not getting a choice. So rather than being held hostage by private companies, nationalisation would enable the providing bodies to be held to account by the public properly. But, this does not mean that I thought the previous nationalised bodies were the beacon of effectiveness, the real challenge in this is how to make a public body effective. I think there are a lot of skills int he public sector now in doing that, and we should use them.

However, if a competition can be had, then that is a good thing. Mobile phone providers on the face of it show that it can work. They have different service quality and tariffs, meaning you get a choice. There is an argument that says if they combined and produced one good service, then that would be better, but that argument could be made with anything at all.

The grey area starts with those smaller businesses that supply into nationalised infrastructure, where does the nationalisation line get drawn. If I’m running a local highways department, do I have to take everything in-house, or can I take my most common jobs in-house and commission bigger jobs out? Or Do i keep my big jobs in-house, and commission out my smaller jobs to local small firms? These decisions would have to be made on a values basis, and cost effectiveness would be a factor. However currently we commission out services to the lower cost providers and absolve our responsibility of values in working by saying they are a contracted out service. In those contracts should not only be money, but standards of duty of care to staff, standards of pay, and the values that we hold close. In short, commission out the service, but make sure that we are also commissioning our values and ethics too. Also, an un-talked about area is if suppliers actually exist in order to have a competition? If there is only one suppler, or a couple, then is that really a good competition?

I recognise this is setting the policy framework. The next step is to determine how to transition, and over what period of time. As contracts come up for renewal, then a Public Service tender should be mandatory to compete (and making sure its a proper one) and if its the right thing to do then those services that should be bought back into public service, will be.

So, to summarise, I think we could take into public service where there is no real choice to the consumer. That could be on a national or regional basis. Yes the public sector would grow again, but I don’t see that as a bad thing as long as we develop drivers to avoid bloat. Service commissioning would be ok as long as we commission values and ethics alongside our services, whilst cost is important, so is the moral value. where good and effective competition can be established, then ensure its a level playing field to let people make purchasing judgement on their values.